Bitcoin will do for money what the internet did for information, and while it could fail, it is more likely to become a globally accepted form of “digital gold” that is fundamental to the financial system long-term.
That was the message from Wences Casares, founder and CEO of Xapo, a digital banking alternative with millions of users globally, speaking at the Cayman Alternative Investment Summit (CAIS20), which is taking place in the Cayman Islands this week (February 6-7).
Interviewed by broadcaster Emma Walden, he explained how when growing up in Argentina, he saw his parents’ life savings wiped out three times through no fault of their own but due to economic crashes or government policy. “My memory of that is not a financial memory but a very emotional memory of the world around us collapsing,” he said. “These things always hit those with no way of defending themselves the hardest.”
When the internet emerged, Casares said he hoped that would help fix this – but that has not happened. Most people globally still do not have access to safe and secure banking, he noted.
Bitcoin can change this, he said. “When I saw bitcoin for the first time I was very sceptical – but I now believe this will do for money what the internet did for information,” he said. “I have now dedicated my career to helping this succeed.”
He predicted bitcoin will become a global meta currency – a global, non-political standard of value in the same way that the world has global standards of measurement or weight. “Bitcoin will become a digital version of gold,” he said.
Despite its challenges, bitcoin has grown and evolved to a remarkable extent over the past decade, he argued, with the number of users and transactions continuing to grow exponentially. If it survives another ten years it will be around for many more hundreds of years, he said.
“It continued to grow even with challenges and when many people saw it as irrelevant. If it continues to grow in the next ten years, I would see that as victory,” Casares said. “Something with that level of ambition takes a long time to mature – it is an oak tree. I may want an oak to grow faster but that is my problem not the oak’s problem. And I think the most incredible part of its evolution has already happened.”
Casares stressed that the key to bitcoin’s long-term value is that it is what he called “a sovereign system” – it obeys no rules other than its own and cannot be manipulated or changed by anyone, including governments.
He argued it is unhelpful to try and convince people of bitcoin’s value and potential. Instead, individuals should take some time out to educate themselves on its potential, he recommended.
“I do not want to impose this on the world but, as an observer of the world, it seems likely we will have a form of digital gold in the future and that will change the world more than the internet,” he said. “My advice would be to invest time in understanding it and invest an amount of capital that you can afford to lose. If I am correct, it could change your life.”
CAIS20, Xapo, Bitcoin, Financial System, Wences Casares, Cayman Islands